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Analysis

Berlin strengthens its hotel supply to meet demand

While Berlin's hoteliers ended 2014 with growth in their indicators, the market is attracting investors. Eight new hotels are already planned for 2015.

Berlin's hotel market is gradually growing as business develops at the destination. VisitBerlin, the entity that manages tourism in the city, already has eight new openings at properties scheduled in 2015. Five hotels will be built in the Mitte and Berlin West districts, adding 1,300 new rooms to the German capital's supply. These will be the Titanic Deluxe Berlin (in March), the Amano Grand Central (this summer), the Titanic Business Berlin (in October), the Grimm's Postdamer Platz (in May) and the Rui Plaza Berlin. To these may be added the 394-room Sheraton Grand Hotel Esplanade, inaugurated last January by Starwood Hotels & Resorts International. These new developments will particularly allow the capital to strengthen its supply of business accommodations, to reach 135,000 rooms at 794 properties.



Developers' and hotel operators' appetites for Berlin may be explained by the dynamism of its hospitality business. The year 2014 was particularly beneficial to the sector, thanks to the organization of several biennial events, such as the International Aerospace Exhibition in May, and more particularly the25th anniversary celebration of the fall of the Berlin Wall in November.

Tourists traveled en masse to commemorate this symbol of the fall of the Iron Curtain. Close to 984,500, from Germany and elsewhere thronged to the capital in November 2014, or 10.3% more than during the same period in 2013. The number of hotel nights even surpassed 2 million. "The anniversary of the Fall of the Wall allowed Berlin's tourism sector to report the best November in all its history," declared Burkhard Kieler, CEO at VisitBerlin. On the weekend of November 9 alone, the occupancy rate of hotels leaped 17 points and the average daily rate increased by 4.1%, for growth by more than 30% in the Revenue per available room, according to data from MKG Hospitality's daily observatory.

November was thus one of the engines driving the annual growth of results at Berlin's hotels. Across the year 2014, the occupancy rate at properties increased by 1.7 points, to reach 77%, and the average daily rate rose 2.2%, to nearly 89 euros, according to data published by MKG Hospitality. Backed by the growth of the two indicators, the RevPAR progressed by 4.5% on the period.

Germany's tourism and hospitality may still have fine days ahead, particularly in terms of development, while Germany has officially announced its candidature to organize the Olympic Games in 2024.

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  • 25 Years after the Berlin Wall came down: hotel performances take off

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